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Used car prices drop more than 11% across Australia

Car Prices

New figures have revealed used car prices continue to drop across Australia due to an increased supply of new cars while the cost of living crisis reduces spend on vehicles.

Recent data from Moody’s Analytics reveals that used car prices are 2.2 per cent lower than they were in July of this year and 11.3 per cent lower than 12 months ago.

Compared to May 2022 when prices peaked, the drop stands at 15.2 per cent. However, prices still remain 49 per cent higher than the pre-COVID levels of August 2019.

Moody’s Analytics associate economist Catarina Noro said, “With global automotive production increasing, price pressures in the used segment are easing.

“While both passenger cars and trucks/SUVs are presenting price declines, prices of utes continue to fall much more than passenger cars.

“This is happening because of significant cuts in the production of passenger cars in recent years.”

Last month saw the most new-vehicle deliveries in Australia, totalling 109,966 sold vehicles according to the Federal Chamber of Automotive Industries (FCAI), which registers an increase of 15.4 per cent from August 2022.

FCAI chief executive Tony Weber said, “The Australian automotive sector continues to demonstrate its strength, with August recording unprecedented sales figures, reflecting both a high level of demand from Australians and improved supply of vehicles.

“As consumers continue to embrace low emissions technologies we are seeing growth in electric, plug-in and hybrid vehicle sales. More than 1 in 6 vehicles sold in the month of August featured low emissions technologies,” he added.

Moody’s Analytics also attributes the spike in new car deliveries to the easing of pandemic supply-chain disruptions, which caused many motorists to panic buy low-kilometre used cars and spend over the odds.

The company, which provides financial intelligence and analytical tools, projects used car prices are expected to fall by 9.5 per cent in 2023, with a further drop of 8.7 per cent in 2024 before stabilising in 2025.

This begs the question for fleet managers: have you optimised your fleet replacement programs well and timed your fleet/vehicle changeovers correctly after Covid? And, regardless of your EV replacement program pace, is lease or buy/sell best?

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